ACIT, New Delhi V. M/s. Moets Bar-B-Cue, New Delhi

ITA 1285/DEL/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 61676 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-05-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 16-05-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 15-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R S NEGI
• Assessee Lawyers: RISHAB JAIN S
• Keywords: Business income

Judgement Text

ITA NO. 1285/DEL/2012 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E, NEW DELHI BEFORE SHRI A.D. JAIN, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NO. 1285/DEL/2012 A.Y. : 2007-08 ASSTT. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-9, NEW DELHI ROOM NO. 357, ARA CENTRE, E-2 JHANDEWALAN EXTN., NEW DELHI VS. M/S MOETS BAR - B - CUE, 50, DEFENCE COLONY MARKET, NEW DELHI 110 024 (PAN/GIR NO. : AAAFM7936M) (APPELLANT ) (APPELLANT ) (APPELLANT ) (APPELLANT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) ASSESSEE BY : SH. ANIL JAIN & SH. RISHAB JAIN, ADVOCATES DEPARTMENT BY : SH. R.S. NEGI, SR. D.R. ORDER ORDER ORDER ORDER PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-XXXII, NEW DELHI DATED 03.1.2012 PERTAINING TO ASSESSMENT YEAR 2007-08. 2. THE GROUNDS RAISED IN THE APPEAL BY THE REVE NUE READ AS UNDER:- 1. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN LAW AND ON FACTS OF THE CASE IN DELETING T HE ADDITION OF ` 16,20,725/- BY HOLDING THAT THE GP RA TE OF ITA NO. 1285/DEL/2012 2 24.54% AS SHOWN BY THE ASSESSEE ON THE BASIS OF AUDITED ACCOUNTS WAS TO BE ACCEPTED INSTEAD OF GP RATE OF 30% APPLIED BY THE ASSESSING OFFICER FOR MAKING THE ADDITION. 2(A). THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) IS ERRONEOUS AND NOT TENABLE IN LAW AND O N FACTS. (B). THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND ANY / ALL OF THE GROUND OF APPEAL BEFORE OR DURING THE COURSE OF THE HEARING OF THE APPEAL. 3. IN THIS CASE ASSESSING OFFICER NOTED THAT DURI NG THE YEAR UNDER CONSIDERATION THE ASSESSEE DECLARED GP RATE IN REST AURANT BUSINESS @ 24.93%. IN THE ABSENCE OF COMPLETE SUPPORTING EVI DENCES, AND IN THE ABSENCE OF JUSTIFICATION OF GP RATIO APPLIED, T HE GP RATE WAS CONSIDERED @ 30% AS APPLIED IN THE EARLIER YEARS. THE GP ON THE TOTAL SALES OF ` 3,19,65,579/- BY APPLYING GP RATIO 2 30% WAS WORKED OUT AT ` 95,90,081/-. THE UNDECLARED GP COMPUTED I N VIEW OF THE ABOVE DISCUSSION WAS WORKED OUT AS UNDER:- GP WORKED OUT AS ABOVE - 95,90,081/- LESS GP DECLARED - 79,69,358/- UNDISCLOSED GP - 16,20,725/- ITA NO. 1285/DEL/2012 3 4. UPON ASSESSEES APPEAL LD. COMMISSIONER OF INCOME TAX (APPEALS) NOTED THAT ASSESSING OFFICER HAS NOT GIV EN ANY SPECIFIC REASON FOR ESTIMATION OF GP @ 30% AS AGAINST THE GP R ATE OF 24.54% AS DECLARED BY THE ASSESSEE. HE HAS SIMPLY STATED THAT IN ABSENCE OF JUSTIFICATION OF THE GP DECLARED, THE GP IS ESTIMATED A T 30% AS IN EARLIER YEARS. LD. COMMISSIONER OF INCOME TAX (APPEALS) F URTHER NOTED THAT HOWEVER THE ESTIMATION MADE IN EARLIER YEARS HAS BEEN KNOCKED DOWN IN APPEAL BY THE TRIBUNAL. THE TRIBUNAL HAD FOUND THE GP RATE DECLARED BY THE ASSESSEE AS PER THEIR AUDITED ACCOUNTS AS RE ASONABLE FOR THE IMMEDIATELY PRECEDING YEAR AT 20.53% WHEREAS THE ASS ESSEE HAS DECLARED GP RATE OF 24.54% IN THE INSTANT YEAR WHIC H IS HIGHER BY 4.1% AS COMPARED TO THE IMMEDIATELY PRECEDING YEAR. LD. COMMISSIONER OF INCOME TAX (APPEALS) FURTHER OBSERVED THAT THOUG H THE PRINCIPLE OF RES JUDICATA DOES NOT APPLY TO THE INCOME TAX PROCEE DINGS, THE ASSESSING OFFICER HAS NOT BROUGHT ANY ADVERSE MATE RIAL ON RECORD TO DISTURB THE BOOK RESULTS SHOWN BY THE ASSESSEE DURI NG THE RELEVANT PREVIOUS YEAR. LIKE IN A.Y. 2006-07, NO UNRECORDE D SALES HAVE BEEN FOUND DURING THE INSTANT ASSESSMENT YEAR. THEREFO RE, LD. COMMISSIONER OF INCOME TAX (APPEALS) HELD THAT FOLLO WING THE REASONING GIVEN BY THE ITAT IN THE ABOVE CITED ORDE R IN THE ASSESSEES OWN CASE, IT IS HELD THAT IT WILL NOT BE PROPER TO PRESUME THAT THE ITA NO. 1285/DEL/2012 4 ASSESSEE EARNED A GP RATE OF 30% IN THE INSTANT A.Y. WITHOUT THERE BEING ANY MATERIAL INDICATING THIS FACT. LD. COMMI SSIONER OF INCOME TAX (APPEALS) CONCLUDED THAT THE GP RATE AS DECLARED BY THE ASSESSEE ON THE BASIS OF AUDITED ACCOUNTS AT 24.54% IS TO BE ACCEPTED IN THE ABSENCE OF ANY ADVERSE MATERIAL ON RECORD. LD. CO MMISSIONER OF INCOME TAX (APPEALS) OBSERVED THAT THE ADDITION MAD E BY THE ASSESSING OFFICER WAS MERELY ON PRESUMPTION AND THE REFORE, NOT SUSTAINABLE AND ACCORDINGLY DELETED. 5. AGAINST THE ABOVE ORDER THE REVENUE IS IN APPEAL BEFORE US. 6. WE HAVE HEARD THE RIVAL CONTENTIONS IN LIGHT OF THE MATERIAL PRODUCED AND PRECEDENT RELIED UPON. WE FIND TH AT ASSESSING OFFICER IN THIS CASE HAS NOT REJECTED THE BOOKS RESULTS OF THE ASSESSEE, NOR HAS GIVEN ANY SPECIFIC REASONING WHY THE GP RATE ADOPTED BY THE ASSESSEE SHOULD BE DISTURBED. ASSESSEE HAS SHOWN GP RATE 24.54%. 20.53% GP WAS ACCEPTED BY THE TRIBUNAL IN THE ASSESSEES OW N CASE IN EARLIER YEARS. THUS, NOTHING HAS BEEN BROUGHT ON RECOR D TO PROVE LACUNAE IN THE ASSESSEES BOOKS OF ACCOUNTS, NEITHER ANY RE ASON HAS BEEN STATED WHY THE GP RATE SHOULD BE DISTURBED AND GP SHO ULD BE ESTIMATED AT 30%. WE FIND THAT THERE IS NO COGENT BASIS IN THE ASSESSING OFFICERS DECISION IN MAKING THE ADDITI ON IN THIS CASE. IN OUR CONSIDERED OPINION, LD. COMMISSIONER OF INCOME TA X (APPEALS) HAS ITA NO. 1285/DEL/2012 5 TAKEN A RIGHT VIEW IN THE MATTER WHICH DOES NOT NEE D ANY INTERFERENCE ON OUR PART. ACCORDINGLY, WE UPHOLD THE SAME. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 16/5/2012, UP ON CONCLUSION OF HEARING. SD/- SD/- [A.D. JAIN] [A.D. JAIN] [A.D. JAIN] [A.D. JAIN] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE 16/5/2012 SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES